ON Semiconductor Announces Proposed Offering of Convertible Senior Subordinated Notes
ON Semiconductor Corp. announced that it proposes to offer $400 million of convertible senior subordinated notes in an institutional private placement. As part of the offering, the company expects to grant the initial purchasers an option to purchase up to an additional $60 million aggregate principal amount of the notes to cover overallotments.
Assuming the initial purchaser's right is exercised in full, ON Semiconductor intends to use the net proceeds of the offering to repay approximately $199.1 million of amounts outstanding under the term loan portion of its senior secured credit facility. In addition, the company intends to repurchase, concurrently with the pricing of the notes, up to $230 million worth of its common stock in privately-negotiated transactions (or approximately 30.3 million shares based on the closing price of the common stock on December 8, 2006 of $7.58 per share). All of the repurchases of shares of common stock by the company are conditioned upon the closing of the offering of the notes. These transactions are expected to reduce the potential dilution upon conversion of the notes. Any net proceeds not used to repay the senior secured credit facility or for share repurchases will be used for general corporate purposes.
